Fung v Stocovaz

[2006] NSWSC 1345

Reported Decision: (2007) 14 ANZ Insurance Cases 61-730

New South Wales

Supreme Court

CITATION:	On Tai Fung v Janice Rosemary Stocovaz [2006] NSWSC 1345 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	20/11/06 21/11/06
JUDGMENT DATE :	8 December 2006
JUDGMENT OF:	Patten AJ at 1
DECISION:	See paragraph 41
CASES CITED:	Roper v Johnson (1873) LR 8 C.P. 167 Darbishire v Warran [1963] 3 All ER 310 Jansen v Dewhurst [1969] VR 421 Hoad v Scone Motors Pty Ltd [1977] 1 NSWLR 88 Murphy v Brown (1985) 1 NSWLR 131 Hyder Consulting (Australia) Pty Ltd v Wilh Wilhelmsen Agency Pty Ltd (2001) NSWCA 313 Port Kembla Coal Terminal v Braverus Maritime Inc (2004) 140 FCR 445 Consort Express Lines Ltd v J-Mac Pty Ltd (2006) FCA 833 Lodge Holes Colliery Company Ltd v Wednesbury Corporation (1908) AC 323 The Board of Governors of the Hospitals For Sick Children and another v Mc Lauglin & Harvey PLC and others (1990) 19 Con LR Harriton v Stephens (2004) NSWLR 694 Radford v De Froberville and another (1978) 1 All ER 33 at page 44. Moore v DER Ltd (1971) 1 WLR 1477
PARTIES:	On Tai Fung - Plaintiff Janice Rosemary Stocovaz - Defendant
FILE NUMBER(S):	SC 15618 of 2005; 20046 of 2006
COUNSEL:	J. Alexis SC with J Gruzman - Plaintiff J Glissan QC with K Manion - Defendant
SOLICITORS:	Gells Lawyers - Plaintiff CKB Partners - Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

Patten AJ

8 December 2006

No:15618 of 2005
No: 20046 of 2006

On Tai Fung v Janice Rosemary Stocovaz

JUDGMENT:

1 On 17 September 2004, the Plaintiff purchased from Mercedes Benz of Sydney, a new Mercedes Benz E200 Elegance Kompressor (the Mercedes) for the sum of $95,563. The purchase was financed by a Hire Purchase Agreement. A few weeks later on 7 November, the Mercedes whilst being driven by the Plaintiff’s wife, Maria, at Bondi Junction was damaged when it came into collision with a vehicle driven by the Defendant. The collision was attributable solely to the Defendant’s negligence. Immediately prior to it, the Mercedes was in “as new” condition.

2 On the following day, Mrs Fung telephoned Perfect Auto Body Pty Ltd (Perfect), a motor vehicle repairer at Alexandria, with a view to having the Mercedes repaired. Perfect was known to Mr and Mrs Fung as it had repaired other Mercedes cars owned by them and they had been satisfied with the quality of its workmanship and service. Moreover, Perfect was not only located close to where they lived, but was listed in Mercedes Benz Workshop Directory as its authorised paint and panel repairer in the Sydney Metropolitan area.

3 Following the telephone conversation, Mrs Fung drove the Mercedes to Perfect, having in the meantime obtained a claim number from the Plaintiff’s insurer Allianz. The vehicle was inspected; an estimate prepared and she was requested to return with the car in two days time. Within that period Allianz apparently approved the estimate.

4 She returned the vehicle as requested and over the next 3 weeks, it was repaired to her satisfaction. The repairs cost $14,197.67 plus GST, and that sum was duly paid by Allianz. Allianz then made claim for $14,197.67 upon the Defendant or her insurer AAMI. The claim was not met, whereupon proceedings in the name of the Plaintiff were commenced against the Defendant in the Local Court, by way of Statement of Liquidated Claim. To the cause of action in negligence, a defence was filed, which relevantly for present purposes, in its amended form contained these paragraphs:

“6. The defendant admits liability for the collision between motor vehicle ARX 87H and motor vehicle WTX191.
7. The defendant admits liability for the loss and damage suffered by the owner of motor vehicle ARX 87H.
8. The defendant denies that the plaintiff has suffered loss and damage as alleged.

9. The defendant denies the quantum of the plaintiff’s claim.

………………………

11. The defendant denies that the whole of the repairs claimed were reasonably necessary to reinstate the vehicle to its pre-accident condition and that the rates and times claimed were reasonable.
14. The defendant asserts that the plaintiff has failed to mitigate its loss.”

5 The action in the Local Court was, on 30 January 2006, transferred to this court on the basis that it raises a question of law or principle, common to many other actions in the Local Court.

6 The Plaintiff also on 30 November 2005 filed a Summons in this court seeking the following relief:

1. A declaration that the plaintiff is entitled to damages from the defendant which indemnify him for the actual costs of repairs to his Mercedes Benz registration number ARX 87H (the motor vehicle), upon the plaintiff establishing, on the balance of probabilities, that the damage was caused by the negligence of the defendant and that repair of that damage was necessary to restore the motor vehicle to its pre-accident condition.
2. Judgment for the plaintiff against the defendant in the sum of $14,197.67 together with interest thereon pursuant to section 100 of the Civil Procedure Act 2005 (NSW).
3. An order that the defendant pay the plaintiff’s costs of the proceedings.”

7 Thus it was that on Monday 20 November 2006, two matters were listed for hearing before me, the transferred action from the Local Court and the summons filed in this court. Mr Alexis SC, with Mr J Gruzman, appeared for the Plaintiff, and Mr J Glissan QC, with Mr Manion, for the Defendants. After a considerable body of documentary material had been read and tendered, the case was adjourned until the following day. On that occasion, at the request of both paries, I made the following order:

“1. Orders that the Court decide pursuant to UCP Rule 28.2, the questions referred to in the schedule below, separately and before all remaining questions in these proceedings.

Schedule;
Upon the assumption that:

(a) the repairs to the Plaintiff’s motor vehicle referred to in Estimate No. 34870 dated November, 2004 (the Estimate) and in Tax Invoice No. 38984 dated 28 January, 2005 from Perfect Auto Body Pty Limited (Perfect), were necessary to restore the motor vehicle to its pre-accident condition; and
(b) the Plaintiff had the damaged motor vehicle repaired by Perfect in accordance with the Estimate; and
(c) the Defendant contends that the actual cost of repairs referred to in the Estimate were not “fair and reasonable”;
1. Is the Plaintiff entitled to damages from the Defendant, which indemnify him for the actual cost of repairs to the motor vehicle referred to in the Estimate?
2. If so, can the Defendant’s liability for damages to indemnify the Plaintiff for the actual cost of repairs to the motor vehicle, be reduced to the extent that the actual costs of repair:
(i) were not “fair and reasonable”; and/or
(ii) were extravagant?”

8 Thereupon, I heard submissions from counsel, at the conclusion of which I reserved my decision.

9 The principle to be decided, as I understand it, is whether, as submitted on behalf of the Plaintiff, he, having acted reasonably and paid for necessary repairs to his vehicle, is entitled to recover the amount so paid without deduction. I note that this is not precisely the question formulated but, in my view, it puts more simply the matter as argued and nothing turns on any difference. It is implicit in the Plaintiff’s contention that the reasonableness of his conduct in acting to minimise his loss is the sole relevant control mechanism. In that connection, of course, the onus of establishing that he failed to minimise his loss lies upon the Defendant who asserts it (Roper v Johnson (1873) LR8CP 167)

10 The contrary position advanced by the Defendant is that she is entitled to restrict the Plaintiff’s claim for the repairs to an amount which is fair and reasonable or, at least, not extravagant or unreasonable.

11 There is no doubting the overriding principle that the Plaintiff is entitled to be restored, so far as money can do so, to the position he was in before the Defendant’s negligence. Moreover, in this case it would be difficult, in my view, to argue that the Plaintiff did not act reasonably. The subject of the Defendant‘s tort was a near new expensive car, the Plaintiff took it for repair to a reputable repairer approved by the car manufacturer and with whom he had had satisfactory dealings in the past, the damage appeared relatively slight and the estimate for repairs (which as it transpired equated with their cost) was approved by an assessor from his insurer.

12 It was submitted by counsel that there is no binding authority directly in point to the issue I need to decide. Nonetheless, there are numerous relevant references in textbooks and cases.

13 For instance, Ogius, The Law of Damages, Butterworths 1973 at page 133:

“Even if the repairs were necessary, the plaintiff will recover the cost only if it was reasonable. If the court considers that the plaintiff was charged an excessive amount, then as in the Pactolus, it is entitled to reduce the award to what is the “ordinary and accustomed rate” for the job.”

14 In similar vein is McGregor on Damages, Sweet and Maxwell Ltd, Sixteenth Edition at paragraph 1328:

“The method of assessing the cost of repair has been elaborated in a number of cases. The cost of repair must be reasonable, both in that the work must be necessary and the charges must not be extravagant. Both test were applied in The Pactolus, the first being decided in the circumstances in the plaintiff’s favour, and the second in the defendant’s.”

15 The Pactolus (1856) Swab 173 seems to have been accepted as stating the law for 150 years. However, as Mr Alexis pointed out with some force, it is, in truth, very flimsy authority. Dr Stephen Lushington, sitting as the President of the High Court of Admiralty was hearing an objection to the report of the registrar and merchants following a collision between the vessels “Young Brander” and “Pactolus” for which the Pactolus had been held responsible. The issues for decision are indicated by the following passage from the report:

“It was also stated that the charges in the shipwright’s bill were excessive. The registrar and merchants took this view of the case; they thought that the putting in the iron plates and bolts was not rendered necessary by the collision; that they had been put in with a view to strengthen her and to enhance her value; and they accordingly disallowed the whole cost of putting in the iron plates and bolts; they also considered that, looking at the high rate of charges, a sufficient discount had not been allowed from the shipwright’s account, and consequently deducted 4½ per cent. additional, and made some other deductions.

16 In a short judgment, (at least in modern terms) Dr Lushington dealt with the question relevant to this case as follows:

“It is expedient now to consider upon what grounds the sum of ₤770 has been deducted from the carpenter’s bill. If it should be proved that this deduction was made because it was established in evidence before the registrar and merchants that repairs were done and additions made which did not become necessary on account of the collision, then the report must be confirmed; but I am of opinion that no evidence as to the general state of American vessels can be put in competition with actual evidence as to the state and condition of the vessel herself; for instance, the best evidence in this case is the evidence of those who saw the vessel after the collision, and deposed to the necessity of repairs; the best evidence in contradiction is that of those who saw the vessel after the collision, and who depose that the repairs were not necessary in consequence of the collision. I am of opinion that I cannot and ought not to rely upon any general evidence as to the fitting out American vessels in these particulars. There are two grounds then upon which no doubt such reductions would be justified, provided the evidence established the fact; first, if the bill be extravagant, the charges exceeding the ordinary and accustomed rate; secondly, if the work done was not rendered necessary by the collision. With regard to the first head, it appears that the registrar and merchants were of opinion that the charges were high, and that a greater discount ought to have been allowed, and accordingly they deducted the sum of ₤94. Now this is a matter on which they were peculiarly competent to form a correct opinion, and I am not satisfied by the evidence that they have miscarried; I shall not, therefore, in this particular, disturb the report.”

17 It is thus to be observed that Dr Lushington, a distinguished and experienced lawyer (in 1856 he had been a judge of the High Court of Admiralty for some 18 Years), seemed to assume, rather than decide, that the law required a deduction “if the bill be extravagant” and “the evidence established the fact”.

18 A number of other cases were referred to in argument but none dealt with the exact point under consideration. Some relevant observations were, for instance, made in Darbishire v Warran [1963] 3 All ER 310, a decision of the English Court of Appeal. However, the issue in that case was whether the plaintiff was entitled to recover ₤192, the cost of repairing a shooting brake which had a market value pre-accident of ₤85. It was thus, as Mr Alexis submitted, a case concerned with the plaintiff’s duty to mitigate. Harman LJ said at page 312:

“It has come to be settled that in general the measure of damage is the cost of repairing the damaged article; but there is an exception if it can be proved that the cost of repairs greatly exceeds the value in the market of the damaged article. This arises out of the plaintiff’s duty to minimise his damages. Were it otherwise it would be more profitable to destroy the plaintiff’s article than to damage it.”

19 Later, at page 313, His Lordship said:

“The county court judge here held that the plaintiff was reasonable in having the car repaired notwithstanding that the cost was more than twice the value. It may well be that the plaintiff, so far as he himself was concerned, did act reasonably and that what he got was of more value to him than the damages represented by the value of the car. The plaintiff, however, did not show that he had any special use for which this car alone was suitable, as for instance, in his business, or anything more than that it was a sound car very well maintained and suited to his ordinary life. In my opinion the judge asked himself the wrong question. The true question was whether the plaintiff acted reasonably as between himself and the defendant and in view of his duty to mitigate the damages.”

20 Pearson LJ at 315 said:

“For the purposes of the present case it is important to appreciate the true nature of the so-called “duty to mitigate the loss” or “duty to minimise the damage”. The plaintiff is not under any actual obligation to adopt the cheaper method: if he wishes to adopt the more expensive method, he is at liberty to do so and by doing so he commits no wrong against the defendant or anyone else. The true meaning is that the plaintiff is not entitled to charge the defendant by way of damages with any greater sum than that which he reasonably needs to expend for the purpose of making good the loss. In short, he is fully entitled to be as extravagant as he pleases, but not at the expense of the defendant.”

21 There are also the remarks of Newton J in the Victorian case of Jansen v Dewhurst [1969] VR 421, including:

“Although there are numerous references in many of the cases, which I have earlier cited, to the plaintiff being under a duty to the defendant to do what is reasonable to minimise his loss or to mitigate the damages, in my opinion, the onus still remains on the plaintiff to satisfy the tribunal which method of assessing his damages is correct, i.e. cost of repair or cost of replacement. There is no onus on the defendant to show that one method (e.g. cost of repair) is incorrect. The general rule is that where there is a prima facie measure of damages, then the burden lies on the defendant of showing that the plaintiff is entitled to recover less than such prima facie measure, because the plaintiff should have minimised his loss.
………………………………..
The plaintiff’s obligation to minimise his loss by acting reasonably is incorporated into the ordinary measure of damages and the onus is on the plaintiff throughout.”

22 Another case referred to was Hoad v Scone Motors Pty Ltd [1977] 1NSWLR 88. The Plaintiffs were dairy farmers whose tractor and mower, respectively 7 years and 3 years old, were destroyed by fire due to the negligence of the defendants. Their need, arising from the exigencies of their business was urgent but they could not obtain suitable second hand equipment. Accordingly, they purchased new items and sought to recover that cost, a claim which was rejected by the judge at first instance.

23 At page 91 Moffitt P said (omitting foot notes):

“The overriding principle in assessing damages is to compensate a plaintiff for his loss. An award upon a basis which would provide greater compensation, or appear to do so, would need critical examination. In Owners of Dredger Liesbosch v Owners of Steamship Edison Lord Wright quoted the words of Lord Sumner in Admiralty Commissioners v S.S. Chekiang as follows: “The measure of damages ought never to be governed by mere rules of practice, nor can such rules override the principles of the law on this subject.”

24 Moffitt P and Hutley JA held that in the circumstances the plaintiffs acted reasonably in purchasing new equipment, but that their measure of loss was not the gross cost of replacement but rather the net detriment arising from the acquisition of the new equipment, an issue which had not been tried. Accordingly, a new trial was ordered limited to that issue (Samuels JA would have dismissed the appeal).

25 Murphy v Brown (1985) 1 NSWLR 131 was another case in which principles governing the assessment of damages payable in respect of a damaged motor vehicle were discussed. There, at first instance, the trial judge had found for the defendant, in the absence of evidence as to the pre-accident value of the vehicle. Priestley JA, with whose reasons Hope JA expressly agreed, commenced his judgment at page 134:

“This appeal from McGuire DCJ raises the following question. Can a plaintiff in proving the quantum of damage he is entitled to recover from a defendant who has negligently damaged his motor car simply prove the reasonable cost of repair to the damaged car and, in the absence of any further evidence in the case claim to be entitled to that figure? Or, must the plaintiff also have evidence before the court from which the court can infer that the value of the plaintiff’s car immediately before it was damaged by the defendant was greater than the amount reasonably required to repair it. (my emphasis)”

26 After referring to Jansen v Dewhurst, His Honour said at page 135:

“The different ways of stating the relevant rule both flow from what is described in the title “Damages” in Halsbury’s Laws of England, 4th ed, vol 12, as “The first principle; restitutio in integrum” which is said to mean that “so far as money can do it, the injured person should be put in the same position as he would have been in if he had not sustained the wrong …” (par 1129 at 430). Professor Luntz’s Australian Commentary already referred to does not dissent from this statement. The question in this case of damage to a plaintiff’s motor car, is whether the principle requires his being restored to the position he would have been in if the accident had not happened by being put in the position of having a car substantially identical with the one that he had at the time of the accident or to the position where he has the car that he had at the time of the accident, in its pre-accident condition. In the case where there is something special about the plaintiff’s car the latter position appears to me to be required by the “first principle”. In the case where, as here, there is nothing special about the car, and in the absence of any authority dealing with the precise distinction, my own inclination is to think that the former of the two ways of putting it is in closer accordance with the “first principle”.”

27 Another case in the NSW Court of Appeal, Hyder Consulting (Australia) Pty Ltd v Wilh Wilhelmsen Agency Pty Ltd (2001) NSWCA 313 is relevant, although again not precisely covering the issue before me. In the course of his judgment Sheller JA at paragraph 54 made the observation:

“In a sense the British Westinghouse case may represent the middle ground. However, the context was that the railway company had replaced the defective turbines with superior turbines. In my opinion, if a defendant negligently damages or destroys the plaintiff’s property and there is no evidence that the plaintiff had any reasonable choice other than to replace or repair what had been damaged or destroyed, the cost of replacement or repair, provided it is not extravagant (my emphasis), is recoverable as damages. In each case it is a question of fact.”

28 Giles JA in the context that the trial judge had based his assessment on an estimated costs of repairs when the actual cost was known said at paragraph 99:

“This does not mean that a theoretical reasonable cost is to be preferred over the actual cost where the actual cost is known and can be taken as the reasonable cost. If the rectification work has not been carried out, then a theoretical reasonable cost must be found and, because damages must be assessed once and for all, must be awarded even though the rectification work might not be carried out. (I have held that, if it is found that the rectification work will never be carried out, no damages should be awarded: see Central Coast Leagues Club Limited v Gosford City Council, 9 June 1998, unreported). But if the rectification work has been carried out and the actual cost is know, that provides sound evidence of the reasonable cost (my emphasis), and should ordinarily provide the basis for damages.”

29 The decision of Hely J in Port Kembla Coal Terminal Ltd v Braverus Maritime Inc (2004) 140 FCR 445 concerned a collision between a ship and a coal berth. Liability was found against the Master of the ship. His Honour stated the principles applicable to the assessment of damages at paragraphs 484 and 485:

“484 The object of the award of damages in an action in tort is, so far as money can, to put the plaintiff back in the position it would have been had the loss not been inflicted: Dredger “Liesbosch” v SS Edison [1933] AC 449 at 459; Johnson v Perez (1988) 166 CLR 351 at 355 (Mason CJ). More generally, the Court will award “that amount in damages which will most fairly compensate him for the wrong he has suffered”: Johnson v Perez at 356 (Mason CJ)

485 If a defendant negligently damages or destroys the plaintiff’s property and there is no evidence that the plaintiff had any reasonable choice other than to replace or repair what had been damaged or destroyed, the cost of replacement or repair, provided it is not extravagant (“my emphasis”) will be recoverable as damages. In each case it is a question of fact: Hyder Consulting (Australia) Pty Ltd v Wilh Wilhelmsen Agency Pty Ltd [2001] NSWCA 313 at [54] (Sheller JA). ”

30 In another case in the Federal Court, Consort Express Lines Ltd v J- MacPty Ltd (2006) FCA 833 where, so far as the judgment of Rares J reveals, there was no issue as to the reasonableness of the sums claimed, His Honour indicated that he regarded reasonableness as a relevant element, in paragraphs 77 and 79 of his judgment :

“77 I am satisfied that the repairs performed to the hydraulics of the vessel’s cranes by Perrott Engineering Pty Ltd in November 1999 were necessary and the sum claimed for them is reasonable.
…………………………………
79 Having reviewed the evidence in the schedule, and the affidavit material relied on by Consort before me, I am satisfied that the costs claimed and the repairs and restoration work performed which are the subject of those claims were reasonable. I find that the repairs and restoration work were at a cost which was reasonably appropriate to bring the vessel into the condition which J-Mac’s admittedly negligent reports had described as being ‘in good condition for her age’.”

31 The decision of the House of Lords in Lodge Holes Colliery Company Ltd v Wednesbury Corporation (1908) AC 323, which was not referred to by counsel, nonetheless, contains, I think, an illuminating passage in the speech of Lord Loreburn LC at 325:

“Now I think a Court of justice ought to be very slow in countenancing any attempt by a wrong-doer to make captious objections to the methods by which those whom he has injured have sought to repair the injury. When a road is let down or land let down, those entitled to have it repaired find themselves saddled with a business which they did not seek, and for which they are not to blame. Errors of judgment may be committed in this as in other affairs of life. It would be intolerable if persons so situated could be called to account by the wrong-doer in a minute scrutiny of the expense, as though they were his agents, for any mistake or miscalculation, provided they act honestly and reasonably. In judging whether they have acted reasonably, I think a court should be very indulgent and always bear in mind who was to blame. Accordingly, if the case of the plaintiffs had been that they had acted on the advice of competent advisers in the work of reparation and had chosen the course they were advised was necessary, it would go a very long way with me; it would go the whole way, unless it became clear that some quite unreasonable course had been adopted.”

32 Another more recent case, which I think contains useful passages, is The Board of Governors of the Hospitals For Sick Children and another v McLauglin & Harvey P L C and others (1990) 19 Con LR 25. That was a building case before Judge John Newey QC sitting in the Queen’s Bench Division (Official Referees Business). His Honour quoted the passage from the speech of Lord Loreburn LC in Lodge Holes Colliery cited above. He also made these observations at pages 94 and 98:

“The plaintiff who carries out either repair or reinstatement of his property must act reasonably. He can only recover as damages the costs which the defendant ought reasonably have foreseen that he would incur and the defendant would not have foreseen unreasonable expenditure. Reasonable costs do not, however, mean the minimum amount which, with hindsight, it could be held would have sufficed (my emphasis) . When the nature of the repairs is such that the plaintiff can only make them with the assistance of expert advice the defendant should have foreseen that he would take such advice and be influenced by it.
………………………………..
If at the date of the trial no remedial works have been carried out by the plaintiff, then the court has in order to assess damages to decide what works should be done. The parties are entitled to put forward rival schemes and the court has to choose between them or variants of them. This was the task which Cantley J had to perform in Dodd Properties (Kent) Ltd v Canterbury City Council [1979] 2 All ER 118 at first instance, and which, as I was reminded, fell to me in London Congregational Union Inc v Harriss (1984) 1 Con LR 96, [1985] All ER 335. The assessment has to be made on the basis of what the plaintiff can reasonably do
Contrary to Mr Potter QC’s submissions, in my view, where works have been carried out, it is not for the court to consider de novo what should have been done and what costs should have been incurred either as a check upon the reasonableness of the plaintiff’s actions or otherwise.”

33 Whether or not any of the authorities quoted are relevantly binding on me, they, in combination with the text books, in my opinion, enable it to be stated:

· The Pactolus, of its own strength, is not compelling authority for the proposition advanced by the Defendant, although that is not to say that the principle acknowledged by Pactolus is incorrect.

· For at least 150 years it seems to have been generally accepted that a plaintiff who has spent money in repairing tortiously damaged property must not only have acted reasonably to minimise his damage but must be capable of withstanding a challenge that the amount spent was, at least, not extravagant or unreasonable.

· In enforcing the principle of restitutio in integrum, courts have been astute to ensure that plaintiffs do not benefit from the defendant’s tort

· The requirement that a plaintiff act reasonably in order to minimise his loss places a significant control or limitation upon the right to seek damages against a tortfeasor even though the onus is upon a defendant to show that the plaintiff did not act reasonably.

· Amounts paid by a plaintiff, acting reasonably, to repair damaged property are “sound”, or, at least, prima facie evidence of the reasonable cost of repairing that property.

· In some of the cases where the issue is primarily whether the plaintiff has failed to mitigate his loss, there is a blurring between that question and the separate but related question which arises in this case. (See for example the remarks of Oliver J in Radford v De Froberville and another (1978) 1 All ER 33 at page 44).

· Some textbook writers and some of the cases use the word, “extravagant”, seemingly in contradistinction to words such as “fair” and “reasonable”.

34 In light of the above statements and before coming to consider the precise question argued before me, it is appropriate to consider the concept of “damage” as an element of the tort of negligence.

35 Spigelman CJ in Harriton v Stephens (2004) NSWLR 694 at paragraphs 5 and following, said:

5 In its Latin form of “restitutio in integrum”, the compensatory principle was described as “the dominant rule of law” by Lord Wright in Owners of Dredger Liesbosch v Owners of Steamship Edison (The Liesbosch) [1933] AC 449 at 463.
6 The compensatory principle is a statement as to the measure of damages. It is not a statement about liability. The gist of an action in negligence is damage , not damages . The former is a reference to loss or injury. The latter is concerned with measurement, leading to a consequential inquiry to determine a sum of money. See Mahony v J. Kruschich (Demolitions) Pty Ltd (1985) 156 CLR 522 at 527; Kenny and Good Pty Ltd v MGICA (1992)Ltd (1999) 199 CLR 413 at [79]; Harold Luntz, Assessment of Damages for Personal Injury and Death (4th ed, 2002), LexisNexis Butterworths, p 1 at par [1.1.1].
7 The formulation of the principle by Lord Blackburn must not be treated as if it is to be found in a statute that has to be construed. The principle is capable of being stated in different terms, not all of which mandate the same answer in a case with unique characteristics, such as the proceedings presently before the Court. (See, e.g., “damages commensurate with the loss he has sustained”, Registrar of Titles v Spencer (1909) 9 CLR 641 at 645; “reparation for the wrongful act and for all the natural and direct consequences of the wrongful act”, Admiralty Commissioners v SS Susquehanna [1926] AC 655 at 661).

36 Mr Glissan submitted, in effect, that, if the contention of the Plaintiff be correct, the Defendant would be deprived of the opportunity to contest damage as an element of the Plaintiff’s cause of action. This somewhat startling result, unsupported by any authority referred to, or which I have been able to find, gives Mr Glissan’s submission somewhat telling force. It means that in an action such as the present, where the plaintiff sues for monies paid to repair his property he will be entitled to succeed for the full amount claimed unless the defendant proves that he failed to minimise his loss. In that connection the law imposes only the undemanding requirement that he act reasonably in the circumstances, a personal obligation, easily satisfied in the light of the authorities quoted above. See also the facts in Moore v DER Ltd (1971) 1 WLR 1477. In the absence of relevant admissions, unless the defendant could prove failure to mitigate, he would be prevented from challenging, not only the unreasonableness or extravagance of the amount claimed, but also, on the basis that the plaintiff discharged his obligation by contracting with a reputable repairer, the right to assert that the work charged for was not performed, was not necessary, or was not related to the defendant’s negligence. He may also be prevented from raising the issue which was sent back for trial in Hoad v Scone Motors. I do not accept that this situation represents the law.

37 Accordingly, I am of the opinion that a plaintiff, acting reasonably, does not have the untrammelled right to recover from a tortfeasor the cost of repairs to his property. Nor, however, in my opinion, is a defendant simply entitled to show that the work could have been carried out more cheaply and to have a deduction on that account from the amount claimed.

38 In my view, the limitation, which the authorities and principles impose, is a limitation designed only to counter extravagance or unreasonableness. The former of those words looms quite large in the cases, and Mr Alexis submitted that its use gives rise to difficulties of interpretation. However, although its meaning may have altered in the last 150 years, the first two meanings of the word “extravagant” given in the Third Edition of the Macquarie Dictionary, are, “1. Going beyond prudence or necessity in expenditure; wasteful. 2. Excessively high, exorbitant.” They are the connotations which, in my opinion, meet the remarks of Lord Loreburn LC in Lodge Hole Colliery and the much more recent references to the word “extravagant” by Sheller JA in Hyder Consulting and Hely J in Port Kembla Coal quoted above. I see no reason why the assertion that a claim is extravagant does not create a justiciable issue.

39 It follows from what I have said that I would answer yes to question 1 in the order made on 21 November 2006; no to question 2 (i); and yes to question 2 (ii). The question for the court in this case on the issue of damage will be whether the Defendant has established that the prima facie or “sound” evidence of loss, proved by the Plaintiff is extravagant and should be subject to deduction. The evidentiary onus will be upon the Defendant.

40 The answers I propose do not necessarily dispose of this litigation and the matter may be listed for further directions by arrangement with my

Associate.

41 The orders I make are:

1. Question 1 posed by the order made on 21 November answered yes.

2. Question 2 (i) ansered no.

3. Question 2 (ii) answered yes.

4. Costs reserved.

12/12/2006 - With consent of counsel providing answer to question which had been left unanswered. - Paragraph(s) 39 and 41